Sexual Harassment: Unprecedented claim against David Jones acts as reminder to take sexual harassment seriously

Posted on: 12 Aug, 2010 |
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The widely publicised $37million claim by Kristy Fraser-Kirk
against the board of David Jones and its former CEO, Mark McInnes,
should act as a wake up call to any employers (and directors) who
do not take sexual harassment seriously.

The case

Ms Fraser-Kirk claims that McInnes sexually harassed her at a
number of David Jones functions. Her complaints include that
McInnes attempted to kiss her on the mouth, put his hand up her
clothing, repeatedly invited her to Bondi (where he lived) with the
clear implication this would be for sexual intercourse and also
texted, emailed and called her.

She goes on to claim that when she first reported the incident
to her supervisor and the general manager she was told they were
not surprised because this conduct had happened before. She says
she was told that next time it happened she should be clear and say
'no, Mark'. No action was then taken against McInnes.

Ms Fraser-Kirk has included David Jones in the claim on the
basis that it knew or ought to have known McInnes was a danger to
young women and deliberately sent her into his presence after she
had raised concerns about his conduct.

Unprecedented claim

The value of the claim against David Jones ($37million) is
unprecedented in Australia because Ms Fraser-Kirk is claiming
punitive damages made up of a percentage of David Jones' profits
while McInnes was CEO and a percentage of McInnes' remuneration
package. Punitive damages may be awarded to act as a deterrent to
the defendant and others from engaging in such conduct again.

While it remains to be seen whether or not Ms Fraser-Kirk is
successful in her claim for such damages (if the case settles we
may never know how much Ms Fraser-Kirk is paid), her claim has
already had a damaging effect on David Jones' reputation and share
price. Substantial damages (albeit in the hundreds of thousands
rather than millions) have been awarded in Australia and this case
serves as a timely reminder that sexual harassment must be taken
seriously.

What should directors and employers be doing?

Ms Fraser-Kirk's claim names the board of David Jones as
defendants. This highlights the growing trend of pursuing directors
personally for breaches of workplace legislation, as raised in our
last alert concerning a claim against a former sole director for
unpaid redundancy entitlements.

Accordingly, we strongly recommend that directors and companies
review and satisfy themselves that the policies, processes and
training in place to handle complaints of sexual harassment are
comprehensive and sufficient. Clear and well understood processes
that apply to all members of staff - from the most junior staff
member to the CEO - must be in place and must be followed.